1. Weekly News

Brazil

Brazil's Wheat Production Drops in 2024 Due to Quality Concerns

Brazil's wheat production significantly declined in 2024, totaling 7.7 million metric tons (mmt). This figure falls short of the 8.1 mmt initially forecast by the National Supply Company (CONAB). In Rio Grande do Sul, the country’s largest wheat-producing state, the harvest was adjusted to 3.7 mmt, down from the earlier estimate of 4.1 mmt. In addition to the reduced supply, concerns have emerged regarding the quality of the harvested grains. However, wheat prices have not fully reflected the decline in availability. According to the International Center for Economic Analysis and Agricultural Market Studies (CEEMA), the average price in Rio Grande do Sul concluded W52 at USD 10.32 per 60-kilogram (kg) bag, while prices in Paraná reached as high as USD 11.39/60 kg in certain regions. These prices represent slight increases compared to the same period in 2023, when they stood at USD 9.97 and USD 10.60 per 60 kg, respectively, but remain below market expectations.

France

France Lowered Soft Wheat Export Forecast to 3.5 MMT for 2023/24 Season

France's soft wheat export forecast to third countries was lowered for the current agricultural season, which started on July 1, 2024. The new forecast is 3.5 mmt, down from the expected 3.9 mmt in Nov-24. If these projections hold, exports will reach their lowest level since the early 2000s, with the last comparable figure being 3.8 mmt in the 2003/04 season. This would also mark a 66% decline from the 2022/23's exports. The expected weak export performance is due to several factors, including a poor soft wheat harvest in France this season, intense competition from other wheat-producing countries, and low demand from key importing regions such as North Africa and China.

Germany

Germany Expands Winter Wheat Area by 12.3% YoY in 2025

According to estimates from the National Statistics Agency, Germany has expanded its winter wheat sown area for the 2025 harvest by 12.3% year-on-year (YoY) to approximately 2.8 million hectares (ha). Favorable autumn weather facilitated planting, unlike in autumn 2023 when heavy rains hindered sowings for the 2024 crops, particularly wheat. As the European Union's (EU) second-largest wheat producer and a major exporter, Germany plays a key role in the region's grain market.

Russia

Russia's Wheat Exports Projected to Decline Sharply in 2025/26

Russia will export 36.4 mmt of wheat during the 2025/26 agricultural year (Jul-25 to Jun-26), significantly lower than 2024/25’s forecast of 43.7 mmt. Exporters have already reduced 2024's estimate from 44.1 mmt due to slower shipment rates and declining margins. Decreasing reserves and a projected decline in the wheat harvest drive the sharp reduction for 2025/26. Despite these challenges, the Union of Exporters estimates Russia's overall grain export potential in 2025 could still reach 45 mmt.

2. Weekly Pricing

Weekly Wheat Pricing Important Exporters (USD/kg)

Yearly Change in Wheat Pricing Important Exporters (W52 2023 to W52 2024)

Russia

In W52, Russian wheat prices remained unchanged week-on-week (WoW) but rose by 4.35% month-on-month (MoM) to USD 0.24/kg. This price increase is due to several key factors, including higher export demand, especially from countries in the Middle East and Asia, and logistical challenges for other global wheat exporters. Russia continues to be a major supplier, with 2024 wheat exports projected to reach approximately 40 mmt, up from 38 mmt in 2023. Moreover, the tightening of global wheat supplies due to poor European harvests has reduced competition, further supporting the upward trend in Russian wheat prices.

France

In W52, French wheat prices remained unchanged WoW but increased by 4.35% MoM to USD 0.24/kg. This price rise is due to strong export demand, particularly from North African countries like Morocco, which have turned to French wheat due to poor local harvests and extended import support programs. Tightened domestic supply, caused by lower carryover stocks, and increased miller purchases during the holiday season further supported the price increase. Moreover, while Russia’s competitively priced wheat has heightened global competition, logistical constraints and buyer preferences in key markets have benefited French exports. Currency fluctuations also played a role, enhancing the competitiveness of French wheat in international markets.

Ukraine

In W52, Ukrainian wheat prices remained stable WoW and MoM at USD 0.24/kg but rose 14.29% YoY. This price increase is primarily due to drought concerns impacting winter wheat planting for the 2025 harvest. The ongoing war with Russia and unfavorable weather conditions have reduced the winter wheat sown area to an estimated 4.2 million ha, down from 4.4 million ha the previous year. These factors will result in a smaller harvest and lower carryover stocks, limiting Ukraine’s exportable surplus. Consequently, these supply constraints and strong global demand have exerted upward pressure on wheat prices.

3. Actionable Recommendations

Diversify Supply Sources and Strengthen Domestic Production

Brazil should focus on diversifying wheat supply sources and strengthening domestic production by increasing investments in drought-resilient wheat varieties, which have been evident in recent years. Varieties like drought-tolerant wheat, such as 'BRS Tarumã' or 'BRS 394,' should be prioritized to ensure better adaptability to changing weather patterns. Furthermore, Brazil can benefit from advancements in agricultural technologies, including innovative irrigation systems, soil moisture sensors, and precision farming techniques. By modernizing farming practices and improving water use efficiency, Brazil can mitigate the impact of adverse weather conditions, enhance yield stability, and reduce dependency on imports during production shortfalls. This would help ensure a more consistent supply in domestic and international markets, stabilizing the wheat industry in the long term.

Enhance Export Market Diversification and Partnerships

France should explore new markets in Asia and the Middle East, where wheat demand is increasing. These regions, such as Saudi Arabia and Egypt, offer significant opportunities for French wheat, especially considering Morocco's increasing demand due to local production shortfalls. Strengthening trade agreements and fostering long-term relationships with these countries will help reduce France's reliance on traditional markets like North Africa and provide a more resilient export portfolio. By actively promoting French wheat’s quality and benefits in these new markets and creating strong regional partnerships, France can offset some of the losses from European markets and increase export opportunities, ensuring continued growth in its wheat sector.

Improve Strategic Reserves and Risk Management Plans

In facing both war-induced disruptions and adverse weather conditions, Ukraine should focus on improving its strategic reserves and risk management strategies. The reduced winter wheat sown area and the uncertainty surrounding the 2025 harvest emphasize the need for stronger resilience in the face of future disruptions. Ukraine can improve its food security by building strategic wheat reserves during surplus years. Enhancing risk management through better forecasting and flexible export policies would allow Ukraine to adapt to domestic and global market fluctuations better. This could include measures such as stockpiling wheat during periods of favorable production and creating financial safety nets for farmers affected by adverse weather. By maintaining a stable supply and mitigating risks associated with fluctuating yields due to the ongoing war and climate challenges, Ukraine can safeguard its domestic market and maintain competitive export prices despite global uncertainties.

Sources: Tridge ,AgroPortal.ua, Interfax, Notícias Agropecuárias, Portal Do Agronegócio, Sinor, Ukr AgroConsult, Zol